Oil hovered above $61 a barrel on Friday, off six-month highs the previous day, as disappointing jobs and factory data dented hopes that the economy of the United States, the world's top energy user, was set for a quick rebound. US data on Thursday signalled that the road to recovery for the economy would be long and bumpy, after a key manufacturing index showed only marginally less weakness and unemployment looked set to hit double-digit levels.
Sentiment was further pummelled by fears that the United States could lose its coveted triple-A credit rating. US crude for July delivery was up 40 cents at $61.45 a barrel by 0630 GMT, after falling 1.6 percent to settle at $61.05 on Thursday. In post-settlement trade on Thursday, it hit a six-month high of $62.26, and is up about 9 percent so far this week.
London Brent was up 44 cents at $60.37. "I think the market has got ahead of itself - we've talked about 'green shoots' of recovery in the economy, but the reality is that it's going to take time to get traction," said Peter McGuire, Managing Director of Commodity Warrants Australia.
The Philadelphia Fed's closely watched indicator of factory activity in the Mid-Atlantic region rose by a fraction in May, with contraction more than markets had expected. The reports come a day after the Federal Reserve, in minutes released from its April policy meeting, said a full US recovery could take five or six years. Ratings agency Standard & Poor's warning that it could cut its top AAA credit rating on the UK also stoked worries the United States could face a similar fate.
OPEC OUTPUT SEEN STEADY US stocks saw a broad sell-off on Thursday, and the dollar hit a two-month low against the yen on Friday, as investors concerned about the US budget deficit, exited dollar-denominated assets. Oil has been on an upward trend since mid-April in an equity-led rally.
Prices have recovered from below $33 in December after a plunge from record highs above $147 in July. It hit a six-month peak on Wednesday after weekly US government inventory data showed a steep drop in crude and gasoline stockpiles ahead of the US Memorial Day weekend, traditionally the start of the summer driving season.